Investors who take an interest in Copper Fox Metals Inc. (CVE:CUU) should definitely note that the Independent Director, Ernesto Echavarria, recently paid CA$0.22 per share to buy CA$636k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

View our latest analysis for Copper Fox Metals

Copper Fox Metals Insider Transactions Over The Last Year

Notably, that recent purchase by Independent Director Ernesto Echavarria was not the only time they bought Copper Fox Metals shares this year. Earlier in the year, they paid CA$0.20 per share in a CA$1.2m purchase. Even though the purchase was made at a significantly lower price than the recent price (CA$0.24), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 9.83m shares for CA$2.0m. On the other hand they divested 1.68m shares, for CA$751k. In total, Copper Fox Metals insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Copper Fox Metals insiders own about CA$80m worth of shares (which is 60% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Copper Fox Metals Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Copper Fox Metals insiders are well aligned, and quite possibly think the share price is too low. Looks promising! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 3 warning signs for Copper Fox Metals (2 are concerning!) that we believe deserve your full attention.

But note: Copper Fox Metals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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